Virgin Atlantic to seek millions in state aid amid Covid-19 slump

Marco Green
March 30, 2020

Nevertheless, the Transport Secretary knowledgeable MPs he can not dismiss the state taking a possession danger in United Kingdom airline corporations which have really been broken by coronavirus.

The government could buy into United Kingdom airlines struggling due to the collapse in demand for air travel, Transport Secretary Grant Shapps has indicated.

Grant Shapps knowledgeable MPs on the Transport Choose Committee that completely nothing had really been dismissed in its suggestions to coronavirus for the air journey market.

Nevertheless, the Transport Secretary claimed current traders "ought to change into a part of the choice".

Virgin Atlantic (VS/VIR) is set to ask the UK Government for a bailout totalling around 300 million according to sources close to the airline.

Airlines across the globe have seen around 90% of their flights grounded as demand for air travel has collapsed following travel restrictions caused by the Coronavirus Pandemic.

It comes after Richard Branson, the billionaire founder of the company, offered to inject $250m into his Virgin Group conglomerate, with the majority going to the airline.

Some airlines like British Airways are still operating a number of rescue flights to bring stranded Brits home.

A government spokesman said: "The aviation sector is important to the United Kingdom economy, and will be able to draw upon the unprecedented package of measures announced by the Chancellor in recent days".

America Senate on Wednesday handed a $58 billion (₤466 billion) assist plan for its airline firm market, that included money cash for paying pilot, workers in addition to personnel incomes.

To bail out, or not bail out?

Virgin Atlantic went public in addition to claimed ₤ 7.5 bn was required.

But then an about turn from the Chancellor.

What the government is offering is bespoke financial support on a case-by-case basis, but only once airlines have exhausted all other options.

Ministers want to be sure that wealthy shareholders play their part.

The other reason an industry-wide package didn't happen was because the airlines involved are ultimately rivals and where as some of them were champing at the bit for a government loan, others were against it.

USA airline Delta owns 49% of Virgin Atlantic while British Airways, which isn't understood to be seeking a bailout, is owned by Spanish group IAG.

Other reports by Click Lancashire

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